Economic Profile and Key Incentives

Wenzhou within the coastal a part of China’s Zhejiang affords an array of alternatives for commerce and funding, and has quickly change into a key hub within the Yangtze River Delta’s financial zone. We talk about the town’s economic system, industries, and competitiveness and supply an summary of the preferential insurance policies accessible which makes investing in Wenzhou a sensible selection for international companies and people.

Wenzhou (in Chinese language 温州), previously often called Wenchow, is a prefecture-level metropolis in China’s Zhejiang province. Particularly, Wenzhou is positioned within the excessive southeast nook of Zhejiang, bordering Lishui to the west, Taizhou to the north, and Fujian to the south.

Wenzhou is a major port metropolis on China’s southeast coast and one of many three most economically developed districts within the province. Town holds a major position on China’s southeast coast and hinterland resulting from its strategic place within the Yangtze River Delta’s financial zone and its shut connections to Shanghai.

From an financial standpoint, Wenzhou is commonly thought-about the cradle of China’s personal economic system due to its in depth personal capital reserves and vibrant personal finance {industry}.

Wenzhou can be the birthplace of a number of emigrants to Europe and america, a lot of whom are entrepreneurs who began eating places, retail, and wholesale companies overseas. Wenzhou folks make up a major variety of ethnic Chinese language residents of Italy the place, in some areas like Tuscany, they account for 90 % of all Chinese language residents.

Because of this, Wenzhou is among the many earlier promoters of the sister metropolis mission in China, representing some of the thrilling and modern facets of municipal international coverage. Being one in all China’s fourteen open coastal cities, Wenzhou established sister metropolis relationships with Ishinomaki, Japan, as early as 1984.

By the tip of April 2020, Wenzhou established sister metropolis relations or pleasant exchanges with 32 cities throughout 22 international locations, together with Japan, Italy, america, the Netherlands, Australia, Austria, India, and the UK.

This enables Wenzhou to create complete interactions within the fields of enterprise and commerce, science and know-how, tradition, training, and sports activities whereas exploring new avenues for the town’s financial improvement.

Financial overview

In 2022, Wenzhou’s GDP reached RMB 802.98 billion (US$112.72 billion), a 3.7 % improve from the earlier yr, whereas the per capita disposable revenue of the town’s residents was RMB 63,033 (US$12,983.15).

Town certified third province-wise when it comes to GDP progress, behind Hangzhou, the capital of Zhejiang province, which reached US$284.67 billion, and Ningbo.

Wenzhou is striving to change into an industry-driven economic system: at present, the town’s secondary sector accounts for 32 % of the provincial GDP.

International commerce and funding

In 2022, Wenzhou’s commerce in items reached a complete worth of RMB 294.96 billion (US$35.79 billion), a stable year-on-year improve of twenty-two.4 %. Exports accounted for RMB 25.02 billion (US$3.68 billion) exports, and imports reached RMB 44.75 billion (US$6.6 billion).

In 2022, exports from Wenzhou to america, Russia, and South America elevated by 44.6 %, 26.5 %, and 39.6 %, respectively, from the earlier yr.

Province-wise, Wenzhou classifies because the fifth largest exporter, behind Ningbo, Hangzhou, Jiaxing, and Shaoxing. In 2022, Ningbo’s international commerce hit RMB 2.5 trillion (US$357.14 billion), whereas Hangzhou’s reached RMB 756.48 billion (US$112.11 billion).

Town counted 2637 new enterprises with import and export rights within the metropolis, together with 714 enterprises with self-operated exports exceeding US$10 million in 2022, a rise of 153 over the earlier yr, and 71 enterprises with exports exceeding US$50 million.

Precise use of international capital grew dramatically by 66.4 % within the first eleven months of 2022, reaching US$545 million. A complete of 5,788 new FDI tasks had been signed all year long. Particularly, the precise use of international capital in high-tech industries reached US$175 million, an annual improve of 41.5 %.

Trade improvement

Apart from its strong industrial exercise and personal economic system, Wenzhou has promoted the transformation and upgrading of conventional industries like electronics, footwear, clothes, vehicles parts, pumps, and valves, in addition to the event of strategic rising industries just like the digital economic system, clever gear, healthcare, new power, and new supplies.

In 2022, the added worth of industries above the designated dimension reached RMB 146.78 billion (US$21.66 billion), a rise of 4.7 % over the earlier yr.

New power

Being a coastal metropolis Wenzhou has wealthy wind, photo voltaic, and energy-efficient useful resource potential. Consequently, the brand new power sector in Wenzhou has been gaining momentum lately.

Town’s new power enterprises above the designated dimension earned RMB 113 billion (US$16.37 billion) in complete in 2021. Retail gross sales of latest power autos rose by 155.8 % within the first six months of 2022.

Wenzhou’s conventional producers of pumps, valves, and devices have established themselves out there by producing important parts for brand new power gear.

Chint Group, as an example, has established itself within the manufacturing of photo voltaic and photovoltaic power, whereas TTN Energy has accelerated analysis and improvement, manufacturing, and gross sales of photo voltaic modules, photo voltaic inverters, and voltage regulators, in addition to market enlargement into international international locations.

In accordance with the native authorities, Wenzhou’s prospects for the brand new power sector will change into much more promising with the launch of a number of tasks with vital funding, cutting-edge content material, and robust industrial initiative.

Digital economic system

On February 22, 2022, Wenzhou launched the 14th 5-12 months Plan (2021-25) on the event of its digital economic system.

In accordance with the plan, the town’s digital economic system will generate a complete worth of RMB 650 billion (US$102.83 billion) by 2025, accounting for 65 % of its GDP. By the identical yr, the important thing sectors of the digital economic system’s added worth would complete RMB 100 billion (US$15.78 billion), or 10 % of its GDP.

To perform this, the town could have a number one position within the improvement of the East Wenzhou Digital Economic system Hall and construct two associated industrial clusters, one between northern Yueqing metropolis and southern Rui’an metropolis, and the second in Pingyang county.

The plan additionally focuses on the development of three industrial chains for digital safety, community communications, and clever computing. In doing so, the native authorities will appeal to 150 new digital economic system tasks, every value over RMB 100 million (US$14.84). These tasks will focus in particular segments of the {industry}, particularly, the Web of Issues (IoT), digital safety, community communications, industrial Web, and blockchains.

Wenzhou was chosen among the many cities internet hosting the launch of the digital yuan app and ranked 27^th among the many prime 100 cities for the event of the digital economic system in China. In April 2022, Wenzhou turned the primary metropolis in Zhejiang province to just accept tax funds in digital yuan. The transfer got here after the announcement by the Folks’s Financial institution of China (PBOC) in regards to the enlargement of the nationwide digital yuan experiments to eleven new areas, together with six cities in Zhejiang.

New supplies

With a concentrate on creating an “industrial base for brand new supplies in China,” Wenzhou is growing this sector by specializing in particular segments corresponding to superior polymers and premium metals.

Previously 10 years, the town has drawn a number of superior polymer materials manufacturing enterprises and tasks, like new engineering plastics and particular rubber, or steel materials manufacturing enterprises and tasks, corresponding to varied metal profiles.

Essentially the most related tasks within the sector are concentrated in some improvement areas, corresponding to Wenzhou New Supplies Trade Science Park, Pingyang Superior Polymer Supplies Industrial Park, Yueqing Excessive-end Metallic New Supplies Industrial Park, Longwan Excessive-quality Particular Metal Industrial Base, and Ouhai Excessive-end Metallic New Supplies Base.

Wenzhou’s key improvement areas

Wenzhou is dwelling to some national-level, provincial-level, and municipal-level key improvement areas, in addition to 17 industrial parks, as per the official listing launched by the Zhejiang Provincial Division of Economic system and Info Expertise.

Wenzhou Financial and Technological Growth Zone

The State Council established the Wenzhou Financial and Technological Growth Zone (WETDZ) in 1992.

WETDZ has particular geographical benefits. It’s located 16 kilometers from Zhuangyuan’ao Deep Water Wharf and 25 kilometers from the Ningbo-Taizhou-Wenzhou Railway close to the boundary of the provinces of Zhejiang and Fujian. The realm is traversed by Binghai Avenue, Shenhai Expressway, and Subway S2.

With a inhabitants of greater than 20,000, WETDZ is linked to a few different close by industrial parks and spans 140.18 sq. kilometers.

After 20 years of building, WETDZ has developed right into a cutting-edge industrial park, combining conventional sectors like footwear and clothes with high-tech ones like biopharmaceuticals, gear and electronics, IT, and new supplies.

Wenzhou Nationwide Excessive-Tech Industrial Growth Zone

The State Council permitted the event of the Wenzhou Nationwide Excessive-tech Industrial Growth Zone (also referred to as Wenzhou Zhenan Expertise Metropolis) in August 2012.

Situated in the midst of the Wenzhou Eastward Technique, it covers an space of 28 sq. kilometers. The area has a cutting-edge, multi-level community of roadways, ports, railroads, and airports. The entire area is traversed by expressways, corresponding to Airport Avenue, Ouhai Avenue, and the S1 line of the town railway.

The event zone focuses on 4 industries: laser know-how, photoelectric power, semiconductor lighting, and optical communications.

In 2022, the zone was dwelling to 230 enterprises with output worth better than RMB 100 million (US$14,78 million), a rise of 27 items over the earlier yr. These companies made up 78.1 % of all companies, a 2.1 proportion level improve. The zone will encourage extra companies to get listed because the variety of operations grows.

Shifting ahead, the zone’s Financial Growth Bureau will additional replace its incentives and rewards, together with:

• RMB 10 million (US$1.48 million) to enterprises listed on the Shanghai-Shenzhen Important Board, the Progress Enterprise Market, and the Science and Expertise Innovation Board;
• RMB 8 million (US$1.18 million) to enterprises listed on Hong Kong, abroad, and Beijing Inventory Alternate;
• RMB 2 million (US$296,876) to the primary enterprise efficiently listed on the Beijing Inventory Alternate and the Science and Expertise Innovation Board;
• RMB 300,000 (US$44,531) to enterprises listed on the Zhejiang Fairness Alternate Middle Rising Enterprise Market; and
• RMB 200,000 (US$29,687) to Class A and B enterprises which have accomplished the shareholding system reform with a income of greater than RMB 10 million (US$15.78 billion) within the earlier yr.

Ningbo-Wenzhou Nationwide Impartial Innovation Demonstration Zone

Ningbo and Wenzhou are two main cities in southeast Zhejiang, positioned nearly 200 kilometers aside. In February 2018, the State Council permitted the institution of a Nationwide Impartial Innovation Demonstration Zone within the Ningbo Excessive-tech Industrial Growth Zone and Wenzhou Excessive-tech Industrial Growth Zone.

The zone goals to change into a world-class new materials and clever manufacturing innovation middle primarily based in Ningbo and a national-level life well being and smart-equipment hub with Wenzhou as its core.

As well as, the federal government is engaged on remodeling the world in an incubator for nationwide personal economic system innovation and entrepreneurship. By 2022, the analysis and improvement (R&D) funding accounted for about 5 % of the whole GDP of the 2 cities mixed.

The zone has welcomed a sequence of innovation facilities, such because the Ningbo Joint Academy of New Supplies, the Beihang College Ningbo Innovation Analysis Institute, and the Fudan College Life Science Innovation Middle.

A number of noteworthy tasks of nationwide relevance are additionally being carried out, together with the Beidou Info Trade Base and the Digital Economic system Industrial Middle.

China Gene Medication Valley

Wenzhou goals to lift the worth of its well being {industry} to RMB 100 billion (US$15.78 billion) by 2025. Thus, the town has accelerated the development of the China Gene Medication Valley (the valley), which is anticipated to play a pivotal position within the metropolis’s well being {industry}.

Established in 2019, the valley spans 5 sq. kilometers and represents an funding of RMB 15 billion (US$13.85 billion). It has already attracted a number of cutting-edge life science tasks and groups of execs and lecturers.

Uren Biotech, for instance, is an modern biotech firm with a concentrate on offering companies, corresponding to storage, preparation, R&D of stem cells and immune cells, and R&D of gene know-how and biopharmaceuticals. The corporate is at present working with the Hematology Division of the First Affiliated Hospital of Wenzhou Medical College. The latter is utilizing the CAR-T know-how created by Uren Biotech to deal with sufferers with a number of myeloma.

In 2022, the valley hosted a complete of 6,053 professionals, together with two academicians, 69 nationwide or provincial main skills, and 187 doctoral and 589 grasp’s graduates.

Ouhai Eyewear Cross-border E-commerce Park

The Eyewear Cross-border E-commerce Park in Wenzhou’s Ouhai district is projected to offer the park with extra financial impetus within the coming years.

With a complete space of 21,000 sq. meters, the Ouhai eyewear park is the one one producing skilled glasses in Wenzhou. It started to draw investments in February 2018, and as of 2022, it’s dwelling to over 109 on-line shops on each Chinese language and worldwide e-commerce platforms, together with quite a few multinational corporations.

The Park is dwelling to greater than 500 eyeglasses companies that collectively make use of 60,000 folks and affords a seamless industrial chain that mixes R&D, design, manufacturing, and gross sales.

It has acquired a number of honorary titles, such because the ‘Nationwide Skilled Demonstration Base of International Commerce Transformation and Upgrading’ and ‘China Eyewear Manufacturing Base’.

As per official information, the Park achieved RMB 1.4 billion (US$207.76 million) in gross sales within the first half of 2022 alone, a rise of 54.37 % over the identical interval in 2021.

Insurance policies supporting international funding in Wenzhou

On September 19, 2022, Wenzhou’s Municipal Authorities launched a doc titled Implementation Opinions on Increasing the Opening up and Selling the Excessive-quality Growth of International Funding (Opinions) highlighting all the most important coverage initiatives towards attracting international funding.

Encourage international funding in key industries

Wenzhou’s authorities goals at encouraging international funding in strategic rising industries, such because the digital economic system, clever gear, life well being, new power, new supplies, in addition to productive companies, corresponding to scientific and technological info, analysis and improvement, and design.

To draw funding in these sectors, the federal government will assist such tasks with a mechanism of rewards and incentives, together with:

• A reward of RMB 1 million (US$147,316) for each US$10 million of international capital used inside one yr interval for tasks within the service {industry}; and
• A reward of RMB 1 million for each US$5 million of international capital used within the span of 1 yr for manufacturing tasks, headquarters or regional headquarters tasks of multinational corporations, and industrial tasks invested by Fortune 500 corporations.

The utmost reward for a single mission is RMB 30 million (US$4.4 million). If the identical mission meets the situations of two or extra rewards within the listing talked about above, just one reward will apply, however the applicant can go for whichever is larger.

Further ensures accessible to main foreign-invested tasks

Wenzhou is searching for to draw international funding in bigger tasks by way of a sequence of concrete ensures. For instance, main foreign-invested tasks, corporations’ headquarters, and R&D facilities are eligible for complete coverage assist within the areas of economic subsidies, land safety, and power consumption indicators. Particularly:

• International-funded tasks with a complete funding of greater than US$1 billion can be listed as nationwide main foreign-funded particular tasks, and change into eligible for land use in keeping with nationwide indicators.
• Wenzhou’s native authorities will organize for land use plans for foreign-funded tasks with a complete funding of greater than US$100 million, funding tasks of the Fortune 500, and self-built workplace property for the headquarters or regional headquarters of multinational corporations.
• International industrial tasks with versatile land switch demand can be granted with versatile years, permitting certified industrial mission land to be granted with a most time period of fifty years, and enterprises can pay the land worth in installments in keeping with the contract.

Promotion of open platform and abroad collaboration

The Opinions name for key platforms, corresponding to WEDZ and the Wenzhou Nationwide Excessive-Tech Industrial Zone, to domesticate worldwide industrial cooperation parks, and appeal to international funding establishing collaborative tasks with international locations like Germany, Italy, and Singapore.

With this goal in thoughts, Wenzhou has established abroad funding attraction workplaces in Beijing, Shanghai, Shenzhen, Hangzhou, Wuhan, and different locations.

Promotion of international funding by way of intermediaries

The federal government goals at encouraging the creation of intermediate funding incentive mechanisms by counties, county-level cities, districts, and municipal useful areas.

The next standards are carried out to reward intermediaries (apart from authorities businesses and civil officers) who efficiently deliver vital international funding into native tasks:

• Those that herald international funding in keeping with the town’s coverage priorities, and if the precise utilized international funding is past US$10 million, can obtain a reward of 0.5 % of precise international funding within the yr.
• The place the incoming tasks are invested by Fortune 500 corporations, an extra one-time reward of RMB 500,000 can be allotted.

Attraction of international skills

International high-level skills who begin their companies in Wenzhou and their international spouses and kids can take pleasure in sure privileges for his or her residence in China. International high-end skills (Class A) who apply for work in China could be granted a Foreigner’s Work Allow with a most time period of 5 years.

Investing in Wenzhou

Wenzhou, together with Suzhou and Dongguan, is thought to be one of many three mannequin cities of post-reform China since it’s the cradle of China’s personal sector. Over the previous 4 a long time, the town has seen great improvement and is incessantly used for example for China’s private-sector success story.

Lately, nevertheless, Wenzhou has needed to face a slowing financial progress and issue in industrial upgrading. To reply to these challenges, the municipal authorities has enabled a sequence of initiatives, by facilitating international funding and benefiting from the town’s reference to Asia, Europe, and the US.

As Wenzhou continues to advertise key sectors, such because the digital economic system, high-end manufacturing, and new supplies, international companies and traders can take full benefit of its favorable atmosphere to upscale their tasks.